MOSL has responded to Ofwat’s consultation on their draft determinations on wholesalers investment plans for the PR24 (2025-30) period.
The response sets out that MOSL believes PR24 represents a once in a generation opportunity to commit the necessary level of investment for the sector to secure our water supplies and deliver benefits for customers and the environment now and into the future. It is also the first price review since the market opened in 2017 that can fully consider the needs of the market and its customers.
One of the priority areas MOSL has highlighted for investment is smart metering given the hourly consumption data they can provide. This will be a key enabler to raising awareness of business water usage and therefore opportunities to use less. The response highlights MOSL’s concerns that the draft determination proposals could lead to larger meters used by water-intensive business being left out of rollouts with wholesalers prioritising the installation or upgrade of the cheapest and easiest meters. This has the potential to impact the ability to meet targeted reductions in business demand.
MOSL’s key messages to Ofwat are:
- We welcome Ofwat calling on wholesalers to deliver all of the 10.3 million smart meters included in their business plans, but are concerned the reduction of allowances and the ‘efficient unit rates’ for companies to deliver them could lead to larger meters used by water-intensive business being left out of rollouts
- We encourage Ofwat to align the final determinations with the recommendations set out in the National Metering Strategy for the market and include targets for small, medium and large meters. Also specific numbers of non-household smart meters to ensure the demand reductions they could enable can be realised
- We support the new performance commitment to reduce business water demand but are concerned the funding and Price Control Deliverables (PCDs) for smart metering create a significant risk that companies will not be able to deliver demand reductions during PR24 to stay on track for Defra’s 9% reduction target by 2038
- The uplift in the strength of the incentive and symmetrical penalties and rewards under the new Business Customer and Retailer Measure of Experience (BR-MeX) incentive appear positive. We look forward to continuing to work closely with Ofwat on the Market Performance Framework (MPF) metrics that could form part of BR-MeX.
Commenting on the response, MOSL CEO Sarah McMath said: “There are a number of positive elements in the draft determinations which have the potential to drive improved outcomes for business customers, the market and the environment. In our response we have focused on encouraging Ofwat to ensure that smart meter roll outs are appropriately funded in the final determinations, and that wholesalers are incentivised to include medium and large meters in roll outs. In turn these water intensive customers have the potential to make a significant contribution towards the business demand reductions needed to stay on track for Defra’s 9% reduction target by 2038”
The full response is available here. If you have any questions on an of the points raised, please email
